A crisis is just what we need

Published May 2, 2010 • Vishal Bardoloi

An old but excellent article from Newsweek that discusses the reality of America’s entitlement programs like Social Security, Medicare and Medicaid. Not only are these systems sinking financially, their weight is dragging America’s economy down with them.

In a previous post I said that our #1 priority in healthcare reform should be to make healthcare itself more affordable - i.e. the cost of going to a doctor or a hospital, the cost of prescriptions, etc. This has nothing to do with insurance - it has to do with what doctors, hospitals, pharmas etc. charge for their services - which I believe is totally askew. The debate currently focuses on insurance, and how to rearrange the numbers to make it all work. Everyone sees insurers as these evil megacorporations that are crushing the little people to squeeze some extra profit. That’s not entirely false, but it misses the point.

I originally said that removing the middlemen (i.e. the insurance agencies) would be a solution. Over the last few days I’ve researched more, and concluded that judgment hasty. The insurance agencies provide a lot of important services to the healthcare system - not least of which is keeping doctors/hospitals/pharmas in check. It’s a tough industry, with patients expecting them to pay for everything under the sun, and DHPs trying to squeeze out the maximum profit.

In light of my research, I think we can and should do a lot more to
reform the entire system. Here are a few more suggestions.

1) Reform the medical training and recruiting process. I am an immigrant. An engineer by trade, I found it relatively easy to enter a great university for higher education, find a job and get my visa processed. I say relatively - because compared to me, most immigrant doctors have a hellish time getting into residency programs. And the number that actually does make it in is extremely small. This makes sense, since most residents’ tuition and expenses come out of the Medicare budget - which means eliminating waste in the Medicare system would be a way to open the gates to more qualified medical
professionals.

2) Reform medical malpractice legislation. The whole system pays a huge cost (tangible and otherwise) to keep the malpractice sharks at bay - and that cost is ultimately borne by us. By encouraging frivolous lawsuits and awarding ridiculous payouts, the judicial system has seriously distorted the priorities of healthcare professionals. Why else do we hear horror stories of people not receiving care, waiting in the ER for hours and hours, because doctors won’t touch them until their insurance paperwork comes through?

3) Create better checks and balances on doctor’s fees and practices. Right now doctors name their own fees to Medicare and insurance agencies. It’s up to the insurers to fight doctors and hospitals on what procedures they deem necessary. The way this plays out is almost never to the benefit of the patient - simply because he’s out of the loop.

4) Educate people on their healthcare options. My friend recently had to pay everything out-of-pocket for a procedure for his visiting father (he didn’t have visitor’s insurance when coming over). While the cost was quite high, he was still able to slash the potential bills by almost half, by asking lots of questions and being persistent. He found that there are alternatives to almost everything - you don’t need a $15,000-per-night room for a procedure; you don’t have to accept the first thing that doctors, nurses and hospital staff tell you; and most importantly, negotiation is possible. The better informed you are, the better your chances of saving.

Sadly, almost everyone who has insurance is completely blind to these facts - something that doctors and hospitals count on so that they can get the maximum out of the insurance companies.

5) For all non-essential procedures, force doctors and hospitals to discuss all potential options, and their relative costs, with the patients or their PILO. According to my friend who designs IT systems for hospitals, doctors have complete lists of options on what procedures to perform, how much each one costs, etc. They are encouraged to opt for the most expensive ones by their superiors and by the pharmas. Such practices, when taken cumulatively, cause significant harm to the system.

Note: I am still educating myself on the whole healthcare system - how it operates and how it got this way. More thoughts and ideas to come soon. Any informative opinions welcome.